ATTOM, has released its first-quarter 2024 U.S. Home Sales Report, which shows that profit margins on median-priced single-family home and condo sales in the United States decreased to 55.3 percent in the first quarter – the smallest level in more than two years.  The decline in typical profit margins, from 57.1 percent in the fourth quarter of 2023 and from 56.5 percent a year ago, came as the median nationwide home price went down quarterly by 4.3 percent, to $330,000.  While prices often fall back during the slower Winter home-selling season each year, the latest decrease marked one of the largest quarterly declines over the past 10 years. At the same time, investment returns for sellers decreased for the second straight quarter after several increases last year, hitting the low point since mid-2021.  Still, even as seller returns slipped, they remained higher than during most of the housing market boom that has continued throughout the nation over the past decade. The same was true in the early months of 2024 for the typical $120,500 gross profit on typical home sales across the country.  “The latest price and profit numbers show notably downward trends, which raises new questions about whether the housing-market boom is indeed ebbing, or even ending, after so many years of improvement,” said Rob Barber, CEO for ATTOM. “But due caution is needed in looking at the first-quarter data and what the patterns mean. We saw a similar downward pattern from late 2022 into early 2023, and then the market surged. Plus, profits and profit margins still are very high by historical measures. Amid all that, the Spring buying season will be a huge barometer for whether the market still has steam in its engine.”  The drop-off in prices and profits comes as a mix of powerful forces is putting both upward and downward pressure on the U.S. housing market.  On the upside, historically low supplies of homes could push prices higher this Spring as buyers compete for a relatively small stock of properties for sale. The recent surge in the stock market also helps by providing more resources for down payments. At the same time, though, mortgage rates have crept back above 7 percent for a 30-year fixed loan and inflation remains near 4 percent. Those factors are pushing up ownership costs during a time when home affordability already is a stretch for average workers across the country, according to a separate ATTOM analysis.  Profit margins decline quarterly and annually in more than half the country  Typical profit margins – the percent difference between median purchase and resale prices – decreased from the fourth quarter of 2023 to the first quarter of 2024 in 89 (66 percent) of the 134 metropolitan statistical areas around the U.S. with sufficient data to analyze. They also were down annually in 71, or 53 percent, of those metros.  That happened as median first-quarter home prices declined more, or went up less, compared to changes that recent sellers were seeing when they originally bought their homes. Those trends, from the point of purchase to the point of resale, translated into lower profit margins in a majority of the country.  Metro areas were included if they had sufficient data and at least 1,000 single-family home and condo sales in the first quarter of 2024.  The biggest year-over-year decreases in typical profit margins came in the metro areas of Lake Havasu City, AZ (margin down from 102.4 percent in the first quarter of 2023 to 76.3 percent in the first quarter of 2024); Naples, FL (down from 88.4 percent to 62.9 percent); Hilo, HI (down from 82.3 percent to 57.8 percent); Crestview-Fort Walton Beach, FL (down from 68 percent to 47.3 percent) and Port St. Luce, FL (down from 92.8 percent to 72.3 percent).  The biggest annual profit-margin decreases in metro areas with a population of at least 1 million in the first quarter of 2024 were in Honolulu, HI (return down from 57.2 percent to 41.3 percent); Birmingham, AL (down from 36.5 percent to 21.7 percent); Austin, TX (down from 49.3 percent to 37.5 percent); San Antonio, TX (down from 35 percent to 25.7 percent) and Salt Lake City, UT (down from 50.7 percent to 42.2 percent).  Typical profit margins increased annually in 63 of the 134 metro areas analyzed (47 percent). The biggest annual improvements were in Peoria, IL (margin up from 32.6 percent in the first quarter of 2023 to 52.8 percent in the first quarter of 2024); Scranton, PA (up from 88.1 percent to 106.5 percent); Oxnard, CA (up from 55.1 percent to 71.2 percent); Rochester, NY (up from 50.4 percent to 65.2 percent) and San Jose, CA (up from 85.8 percent to 100 percent).  Aside from Rochester and San Jose, the largest annual increases in profit margins among metro areas with a population of at least 1 million came in San Diego, CA (up from 65.3 percent to 73.8 percent); Tucson, AZ (up from 49.8 percent to 57.4 percent) and New York, NY (up from 55.7 percent to 62.7 percent).  Prices down quarterly in most of nation although still up annually  Nationwide, the median price of single-family homes and condos declined quarterly to $330,000, down from $345,000 in the fourth quarter of 2023 (a record hit several times over the past two years). The typical home sale decreased quarterly in 112 (84 percent) of the 134 metro areas around the country with enough data to analyze,  However, latest median prices remained 3.1 percent higher than the $320,000 level in the first quarter of 2023, rising annually in 103 of the metros reviewed (77 percent).  Metro areas with the biggest decreases in median home prices from the fourth quarter of 2023 to the first quarter of 2024 were Pittsburgh, PA (down 11.5 percent); Flint, MI (down 10.7 percent); Memphis, TN (down 10.7 percent); Birmingham, AL (down 10.2 percent) and Montgomery, AL (down 9.7 percent).  Aside from Pittsburgh, Memphis and Birmingham, the largest quarterly median-price decreases in metro areas with a population of at least 1 million were in St. Louis, MO (down 8.1 percent) and Indianapolis, IN (down 7.4 percent).  Metro areas with a population of at least 1 million where the median home price remained up most from the first quarter of last year to the same period this year were Rochester, NY (up 13.2 percent); Hartford, CT (up 12.2 percent); Cincinnati, OH (up 8.9 percent); Providence, RI (up 8.8 percent) and San Jose, CA (up 8.5 percent).  Homeownership tenure down slightly  Homeowners who sold in the first quarter of 2024 had owned their homes an average of 7.77 years. That was down from 7.88 years in the fourth quarter of 2023, but up from 7.44 years in the first quarter of 2023.  Average tenure was up from the first quarter of 2023 to the same period this year in 73 percent of metro areas with sufficient data. The largest annual increases were in Redding, CA (tenure up 23 percent); Santa Cruz, CA (up 17 percent); Yakima, WA (up 13 percent); Oxnard, CA (up 13 percent) and Jacksonville, FL (up 13 percent).  The longest 40 average tenures among sellers in the first quarter of 2024 were again in the Northeast or West regions of the U.S. They were led by Barnstable, MA (13.2 years); New Haven, CT (13.06 years); Bridgeport, CT (12.99 years); Santa Cruz, CA (12.94 years) and Oxnard, CA (12.36 years).  The smallest average tenures among first-quarter sellers were in Provo, UT (6.33 years); Panama City, FL (6.57 years); Austin, TX (6.59 years); San Antonio, TX (6.6 years) and Chattanooga, TN (6.61 years).  Lender-owned foreclosures inch upward but remain low  Home sales following foreclosures by banks and other lenders represented just 1.7 percent, or one of every 59 U.S. single-family home and condo sales in the first quarter of 2024. That was up from 1.5 percent in the fourth quarter of 2023, but unchanged from 1.7 percent in the first quarter of last year. The latest figure remained just a tiny fraction of the 30.1 percent peak this century hit in early 2009 during the aftermath of the Great Recession of 2007.  Among metropolitan statistical areas with a population of 200,000 or more and sufficient data to analyze, those areas where REO sales represented the largest portion of all sales in the first quarter of 2024 included Peoria, IL (9.6 percent, or one in 10 sales); Davenport, IA (7.7 percent); Warner Robins, GA (6.2 percent); Macon, GA (5.9 percent) and Baton Rouge, LA (5.3 percent).  Cash sales show small increase  Nationwide, all-cash purchases accounted for 41.1 percent of single-family home and condo sales in the first quarter of 2024. That was up slightly from 40.7 percent in the fourth quarter of 2023 and from 39.7 percent in the first quarter of last year.  “Cash-sale levels barely moved in the early months of 2024, but the portion could easily rise given the recent increase in mortgage rates,” Barber said. “Higher rates mean higher costs, which provides more incentive for buyers who can afford it to forego mortgages in favor of all-cash deals.”  Among metropolitan statistical areas with a population of 200,000 or more and sufficient data to analyze, those where cash sales represented the largest share of all transactions in the first quarter of 2024 included Birmingham, AL (70.1 percent of all sales); Claremont-Lebanon, NH (69.8 percent); Macon, GA (64.7 percent); Naples, FL (63.7 percent) and Youngstown, OH (61.7 percent).  Those where cash sales represented the smallest share of all transactions in the first quarter of 2024 included Greeley, CO (14 percent); Charleston, WV (20 percent); Bremerton, WA (21.4 percent); Boulder, CO (22.2 percent) and Cedar Rapids, IA (23 percent).  Institutional investment unchanged  Institutional investors nationwide accounted for 6.2 percent, or one of every 16 single-family home and condo purchases in the first quarter of 2024. That was unchanged from the fourth quarter of 2023, although slightly down from 6.4 percent in the first quarter of last year.  Among states with enough data to analyze, those with the largest percentages of sales to institutional investors in the first quarter of 2024 included Tennessee (9.4 percent of all sales), Alabama (9.2 percent), Indiana (8.7 percent), Kansas (8.5 percent) and Oklahoma (8.4 percent).  States with the smallest levels of sales to institutional investors in the first quarter of 2024 included Rhode Island (2.5 percent), New Hampshire (2.9 percent), Maine (2.9 percent), Massachusetts (3.6 percent) and New York (3.6 percent).  FHA-financed purchases also remain at same level  Nationwide, buyers using Federal Housing Administration (FHA) loans comprised 8.7 percent of all single-family home and condo purchases in the first quarter of 2024 (one of every 11). That was the same portion as in fourth quarter of 2023 although up a small amount from 8.3 percent a year earlier.  Among metropolitan statistical areas with a population of 200,000 or more and sufficient data to analyze, those with the highest levels of sales to FHA purchasers in the first quarter of 2024 included Merced, CA (25.6 percent of all sales); Bakersfield, CA (22.5 percent); Lakeland, FL (22.2 percent); Visalia, CA (21.3 percent) and Charleston, WV (18.9 percent).

Home buyers are willing to pay more for a backyard decked out with all the bells and whistles. New Zillow® research finds homes equipped with an outdoor TV command 3.1% more than expected — or $10,749 on a typical U.S. home. That's the highest sale price premium of all 359 features Zillow analyzed across nearly 1 million home sales in 2023.   Homes with other desirable backyard features such as an outdoor shower, pizza oven and bluestone patio also fetch higher-than-expected sale prices when those features are mentioned in a listing description. Six of the top 10 features that help homes sell for more are outdoor features, signaling that the pandemic-era demand for functional outdoor space remains.   Certain trendy or viral features can attract more competing buyers, contributing to a speedier sale. Rounded corners, popular in contemporary furniture design and now architecture (hello, curvy kitchens), can help a home sell six days faster than similar homes. #Plantparents snap up homes that mention a plant ledge in their listing description more than five days faster than expected. Statement terrazzo tile can help a home stand out and sell nearly four days faster.   "When certain home features or design styles are highlighted in a listing description, they serve as a signal to a buyer that a home is appealing and up-to-date. As a result, those features can help a home sell faster and for more money," said Amanda Pendleton, Zillow home trends expert. "On the flip side, certain features can suggest a home is dated and needs work, and can lower a home's sale price. Features like laminate or tile countertops can hurt a home's value by at least 1% when mentioned in a listing description."  In with the new  Modern features that signal a home is either brand new or recently remodeled contribute to higher sale premiums. The current look of contemporary homes often incorporates matte black finishes and white oak flooring, which can boost a home's sale price by 2.9% and 1.6% respectively.   Soapstone now outperforms quartz as the countertop material of choice, contributing to a sale premium of 3% versus 1.7%. And a beverage center is the new wine fridge. Beverage centers can help a home fetch a 2.4% sale premium, compared to 0.9% for wine fridges. These undercounter refrigerators offer different temperature settings for different types of beverages, not only wine.    If you've got it, flaunt it  Homeowners looking to sell for top dollar this spring will want to highlight these home features if they've got them. However, installing an outdoor shower or any of these individual features solely for resale may not deliver these kinds of returns. Instead, these keywords should be viewed as signals about everything else a home has going for it. For instance, if a home has an outdoor shower, it probably has a pool or is close to the beach, which is what buyers are ultimately willing to pay more for.    Sellers should also keep in mind that features that help homes sell in one neighborhood may not resonate with buyers somewhere else. An experienced local real estate agent with extensive market knowledge can help sellers highlight the right features, and will likely have other creative pricing and marketing strategies to help maximize a home's sale price.  Affordability curbs features' price premiums  Price premiums for individual features were lower across the board in 2023 compared to previous years, as buyers' budgets were constrained by higher mortgage rates. Affordability remains the biggest hurdle for home buyers, particularly first-time buyers, who must prioritize "need to have" features over "nice to have" features.  Home shoppers will face similar affordability challenges this spring home shopping season, along with more competition for homes that have sought-after features. Affordability calculators can help buyers set a budget, and buyers can then search for homes by monthly cost on Zillow instead of by purchase price. With attractive homes flying off the market in only 17 days, prospective buyers should get pre-qualified for a mortgage first, so they can act quickly when the right home comes along — with or without an outdoor TV.